How to Trade Away Risk After the Jobs Report

Between the stunningly bad jobs report and the mess in Europe, investors have more than their share of reasons to avoid risk. Here's how.

There's an ugly contest on between the euro and the dollar. Since today's report of no job growth in August, interest rates have been falling along with the dollar as investors question whether the Federal Reserve will take new dollar-denting steps to boost the economy.

Meanwhile in Europe, resistance to the bailout plan is building, and as economic reports indicate more weakness, there is talk of interest rate cuts before the year is out - which could provide some downside pressure on the euro, says Willie Williams, a currency analyst at Societe Generale.

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How do you avoid all these risks? Williams recommends buying the dollar against the Mexican peso.

"Right now I think we're at risk of seeing emerging markets sell off even further," Williams told CNBC's Scott Wapner. In addition, Mexico has such heavy exposure to the U.S. - and doesn't have the same safe-haven status as the dollar - that it could suffer more than the greenback as the U.S. economy falters.

Williams likes buying the dollar against the peso at 12.35 with a stop at 12.25 and a target of 12.75.

You can watch the videotaped discussion, starting at 3:35.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.